For Each of the Numbered Items, Choose the Appropriate Classifications

question 114

Essay

For each of the numbered items, choose the appropriate classifications for a manufacturing company. If in doubt about whether the cost behavior is basically variable or fixed, decide on the basis of whether the total cost will fluctuate substantially over a wide range of volume. All items have two answers among the following possibilities.
A. Selling cost
B. Manufacturing costs, direct
C. Manufacturing costs, indirect
D. General and administrative cost
E. Fixed cost
F. Variable cost
1. advertising
2. treasurer's salary
3. depreciation on office equipment
4. depreciation on factory equipment
5. direct labor
6. direct materials
7. office supplies
8. foreman's salary
9. indirect labor
10. indirect materials

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Definitions:

Variability

The lack of consistency or the tendency to vary, especially in the context of supply chain, leading to challenges in predicting demand, lead times, and inventory levels.

Bullwhip Effect

A phenomenon in supply chains where small fluctuations in demand at the retail level cause progressively larger fluctuations in demand upstream, often leading to inefficiency and increased costs.

Lot Sizes

The quantity of goods processed, produced, purchased, or delivered in a single batch or order, affecting manufacturing efficiency and inventory management.

Operational Improvements

Enhancements or optimizations made to the processes and procedures of an organization to increase efficacy, efficiency, and overall performance.